India to adopt new Startups definition recommended by G20 Engagement Group

New Delhi, Apr 18 (KNN) The first draft of common definition of startups based on size of business, revenue and innovativeness prepared by the G20 Startup20 Engagement Group is likely to be made public by May 15, 2023.

The G20 countries plan to finalise a common definition of startups based on size of business, revenue and innovativeness by early July, with an aim to bring uniformity in their valuation and taxation, reported ET.

“The agenda is to have a definition of startups in G20. Lack of a common definition is a key issue because of which valuation internationally and tax imposed are done differently,” an official told ET.

Discussions are currently among the grouping to arrive at a joint communique by the summit meeting in the first week of July.

The definition of a startup as per the Department for Promotion of Industry and Internal Trade (DPIIT) is an entity up to 10 years from its date of incorporation provided its turnover for any of the financial years since incorporation does not exceed Rs 100 crore.

Some G20 members, including those from the European Union, define startups as entities which are less than 10 years of setup, innovate in product and business models, and aim to scale up. South Korea defines all small and medium enterprises as startups.

“There needs to be a clear understanding on how a jurisdiction views startups. The Startup Group is working on whether there can be complete harmony across all issues or flexibilities can be explored,” said Chintan Vaishnav, Startup20 India chair.  (KNN Bureau)